Report: Spotify pays ‘Apple tax’ on fewer than 1% of subscribers — updated

From a Music Business World mail blast that hit my desktop Monday:

In March, Spotify filed an anti-trust complaint against Apple with the European Commission regarding Apple’s 30% ‘app tax’. At the time Spotify boss Daniel Ek argued in a blog post that Apple was “essentially acting as both a player and referee to deliberately disadvantage other app developers.”

However, according to Apple’s response to Spotify’s complaint, revealed today, Spotify doesn’t actually pay Apple a 30% ‘tax’ on anything. What’s more, says Apple, Spotify hasn’t paid any additional commission on a single subscriber obtained via the App Store for the past three years.

In fact, according to an argument seen by MBW, Apple says that Spotify only pays a 15%’app tax’ revenue share on just 0.5% of the latter’s 100 million premium subscribers worldwide. That equates to around 680,000 customers acquired during 2014-16 when these subscribers used ‘In App Purchase’ – but Spotify apparently switched off subscriptions via the app after that.

My take: A provocative claim, but thinly sourced. Where’s this Apple “response”? How can I get it?

I’ve reached out to Spotify PR for comment.

UPDATE: Der Spiegel ($) was the source for Apple’s response to Spotify. The Verge figured out what was wrong with it:

Apple Cites Irrelevant Spotify Subscription Stats In New Antitrust Defense 

The takeaway message is supposed to be that Spotify is blowing its complaint way out of proportion, but those small numbers don’t tell the full story — they basically don’t matter, because Spotify gave up on App Store subscriptions years ago.

Spotify only offered subscriptions through the App Store between 2014 and 2016. That means subscription numbers have had years to dwindle. In 2016, Apple also reduced the cut it takes from subscriptions after they’ve been active for more than a year, bringing it down from 30 percent to 15 percent. That means Apple is only taking the lower number from Spotify, because Spotify hasn’t signed up any new subscribers in years.

2 Comments

  1. Gregg Thurman said:

    I wish my Fed tax rate was so low.

    0
    June 24, 2019

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